# 2022-298 Pay and Benefits, Canadian Armed Forces Relocation Directive, Home Equity Assistance, Home Equity Assistance Program, Relocation benefits

Case summary

F&R Date: 2024-04-04

On 19 April 2018, revisions to the Canadian Forces Integrated Relocation Program (CFIRP) Directive came into effect, removing the ability to apply for 100% Home Equity Assistance (HEA) reimbursement from the Core envelope for homes sold in a depressed market area. The grievor's home in Cold Lake sold in September 2021, resulting in an equity loss of approximately $140,000. The grievor was reimbursed approximately $40,000 through the HEA benefit. The grievor argued that they had purchased their home with the assurance that the HEA policy in effect at the time would provide protection from high equity losses. The grievor sought full reimbursement of their home equity loss.

The Initial Authority, the Director General Compensation and Benefits, found that the grievor had been treated in accordance with applicable policies and regulations.

The Committee cited an interview given by the Director of Compensation and Benefits Administration (DCBA) to the Canadian Broadcasting Corporation in May 2018, where the DCBA stated that the intent of the Canadian Armed Forces (CAF) was to address catastrophic home equity losses using a “caveat” found in the CFIRP Directive. DCBA staff later advised the Committee that the “caveat” was CFIRP Directive article 2.1.01, which allowed for the Treasury Board Secretariat (TBS) to approve requests for reimbursement of expenses that are exceptional circumstances. The Committee noted that the Canadian Armed Forces Relocation Directive (CAFRD) replaced the CFIRP Directive on 1 April 2021 and, most unfortunately, removed the “caveat” of CFIRP article 2.1.01. Given the strong precedence set by the Final Authority (FA) that the HEA benefit remains inadequate and that CAF members should not absorb such catastrophic equity losses, notwithstanding the removal of the “caveat” the Committee found that the grievor was deserving of reimbursement of their home equity losses.

The Committee also observed that taxation of the current $30,000 HEA maximum reimbursement from the Core funding envelope serves to further reduce the benefit received by the grievor. Given that taxation is governed by the Income Tax Act, the Committee recommended that the CAF work with the TBS to pursue a reduction in this tax burden on military members.

The Committee recommended that the FA afford the grievor redress by pursuing a mechanism to enable the grievor's request for 100% reimbursement of their HEA loss, potentially through a submission to the Treasury Board with the full support of the CAF.